HYMAN: Audit the spectrum before auctioning it

OPINION:

There is an ongoing battle between television broadcasters and the cellular telephone industry. Steve Largent, president of CTIA - The Wireless Association, has lobbied exhaustively for the auction of broadcast television spectrum to solve a purported cellular spectrum shortage. Mr. Largent has been echoing a claim first made by Federal Communications Commission (FCC) Chairman Julius Genachowski in an appearance before Mr. Largent’s trade group in 2009.

Mr. Genachowski warned of a “looming spectrum crisis” and said the solution was to auction TV spectrum. However, he gave no evidence to back up his claim. This lack of evidence has been highlighted by broadcasters, who note the only independent study of the matter supports their skepticism. A Citigroup analysis reported that the entire cellular telephone industry is using only 192 MHz out of 838 MHz of assigned spectrum.

Cellular giants have reason to hoard spectrum. Rural and regional wireless companies unable to acquire a national footprint are prevented from competing with the big four carriers - soon to be three following the AT&T/T-Mobile merger. Broadcasters are understandably concerned over the details of auction proposals, including any that solicit stations to voluntarily relinquish spectrum. The FCC will repack remaining stations into a 40 percent smaller spectrum footprint. One study indicates scores of TV stations would be left without a new channel assignment. This would disenfranchise the 46 million viewers who rely on over-the-air TV, especially the elderly, minorities and low-income families. Exacerbating the situation is the growth in “cutting the cord” by viewers who are disconnecting subscription TV service in record numbers. (Disclosure: The writer is employed by a broadcaster that could be impacted by spectrum policy changes.)

There are even international complications to the FCC’s repacking plan. U.S. TV stations within 224 miles of Canada’s border cannot be reassigned channels without violating a treaty between the two countries. Rep. John Conyers, Michigan Democrat, was shocked when he recently learned that all nine TV stations in Detroit would have to cease broadcasting over the air. Philadelphia, San Francisco, and Seattle would lose more than half of their television stations. More than 130 stations nationwide would be off the air under the FCC plan to auction TV spectrum.

Congress has been mulling over the auction proposal for months. However, it has recently morphed from a policy discussion into a budget-balancing initiative. Congressional sources acknowledge that the fate of a broadcast spectrum auction rests in the hands of the deficit reduction supercommittee as it attempts to close a $1.5 trillion budget deficit. The Congressional Budget Office scored the auction proposal as raising a mere $6.5 billion for the U.S. Treasury, enough to pay only 18 hours worth of the national debt.

The real culprit is not spectrum shortage but spectrum management. The broadcast industry returned 108 MHz of spectrum to the government for auction as part of the 2009 digital TV transition. An entire block of this spectrum went unsold. For years, the FCC has not resolved several proceedings regarding unused and under-utilized spectrum. Additionally, senior officials at Verizon and Sprint have publicly stated there is no spectrum shortage. The FCC’s staff privately question how their boss arrived at his conclusion that there is a spectrum crisis.

The Commerce Department identified nearly 1,500 MHz in government hands possibly available for reassignment with 115 MHz available for wireless broadband on a favorable timetable. Yet, the FCC remains focused on broadcast spectrum, which comprises only 5 percent of what is known as “prime spectrum” (225 MHz-3.7 GHz). Federal entities possess 70 percent.

The spectrum shortage claim sounds eerily similar to the manmade global warming hysteria. Proponents argue there is no time for studies and that the situation requires immediate action. Sadly, we’ve already been down this leap-before-we-look path. The correct first step is to conduct an inventory of all government, military and commercial spectrum use. In 2003, President George W. Bush directed the National Telecommunication and Information Administration (NTIA) and the FCC to increase spectrum efficiencies. The NTIA supervises government and military spectrum and the FCC manages commercial and nonfederal government use. The two agencies have yet to complete the assignment, as noted by the Government Accountability Office in two reports since 2004. A thorough spectrum audit would provide lawmakers with complete information to formulate a coherent spectrum policy. Any action to sell, auction or otherwise permanently reassign spectrum would be premature and may be regrettable.

Mark Hyman hosts “Behind the Headlines,” a commentary program for Sinclair Broadcast Group.